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Reserve Bank keeps main interest rate unchanged at 8.25%

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Reserve Bank keeps main interest rate unchanged at 8.25%

Reserve Bank Governor Lesetja Kganyago
Reserve Bank Governor Lesetja Kganyago

18th July 2024

By: Reuters

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South Africa's central bank kept its main interest rate unchanged at 8.25% in a decision announced on Thursday.

Eighteen of 20 economists polled by Reuters predicted there would be no change in the repo rate.

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The decision by the central bank's Monetary Policy Committee was split, with four members preferring an unchanged stance and two preferring a 25-basis-point rate cut.

Monetary policy has remained tight in Africa's most industrialised economy as the South African Reserve Bank tries to steer inflation back towards the midpoint of its 3%-6% target range.

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Consumer inflation stood at 5.2% year on year in May, the latest month for which data is available, the same as in April.

"Domestically, inflation expectations do not yet reflect the 4.5% midpoint objective over the medium term," central bank Governor Lesetja Kganyago said in a statement accompanying the decision.

Economists polled by Reuters before Thursday's announcement predicted a 25-basis-point cut in September followed by another in November.

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